Monetary Policy Reaction Functions: ECB versus Bundesbank
AbstractWe estimate monetary policy reaction functions for the Bundesbank (1979:4-1998:12) and the European Central Bank (1999:1-2003:7). The Bundesbank regime can be characterised, both before and after German reunification, by an inflation weight of 1.2 and an output weight of 0.4. The estimates for the ECB are 1.2, and 1, respectively. Thus, the ECB, while reacting similarly to expected inflation, puts significantly more weight on stabilising the business cycle than the Bundesbank did.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0312007.
Date of creation: 19 Dec 2003
Date of revision:
Note: Type of Document -
Contact details of provider:
Web page: http://126.96.36.199
Taylor rule; monetary policy; ECB; Bundesbank;
Other versions of this item:
- Hayo, Bernd & Hofmann, Boris, 2003. "Monetary policy reaction functions: ECB versus Bundesbank," ZEI Working Papers B 24-2003, ZEI - Center for European Integration Studies, University of Bonn.
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gerlach, Stefan & Schnabel, Gert, 1999.
"The Taylor Rule and Interest Rates in the EMU Area,"
CEPR Discussion Papers
2271, C.E.P.R. Discussion Papers.
- Gerlach, Stefan & Schnabel, Gert, 2000. "The Taylor rule and interest rates in the EMU area," Economics Letters, Elsevier, vol. 67(2), pages 165-171, May.
- Domenech, Rafael & Ledo, Mayte & Taguas, David, 2002.
"Some new results on interest rate rules in EMU and in the US,"
Journal of Economics and Business,
Elsevier, vol. 54(4), pages 431-446.
- Rafael Domenech & MÂª Teresa Ledo & David Taguas, 2000. "Some new results on interest rate rules in EMU and in the US," Working Papers 0002, BBVA Bank, Economic Research Department.
- Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
- Volker Clausen & Bernd Hayo, 2002.
"Monetary Policy in the Euro Area - Lessons from the First Years,"
- Hayo, Bernd & Volker Clausen, 2003. "Monetary Policy in the Euro Area - Lessons from the First Years," Royal Economic Society Annual Conference 2003 103, Royal Economic Society.
- Clausen, Volker & Hayo, Bernd, 2002. "Monetary policy in the Euro area: Lessons from the first years," ZEI Working Papers B 09-2002, ZEI - Center for European Integration Studies, University of Bonn.
- Jinyong Hahn & Jerry Hausman, 2003. "Weak Instruments: Diagnosis and Cures in Empirical Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 118-125, May.
- Richard Clarida & Jordi Gali & Mark Gertler, 1998. "Monetary policy rules in practice," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
- Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-29, October.
- Efrem Castelnuovo, 2004.
"Taylor rules, omitted variables, and interest rate smoothing in the US,"
- Castelnuovo, Efrem, 2003. "Taylor rules, omitted variables, and interest rate smoothing in the US," Economics Letters, Elsevier, vol. 81(1), pages 55-59, October.
- James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
- Ilian Mihov, 2001. "Monetary policy implementation and transmission in the European Monetary Union," Economic Policy, CEPR & CES & MSH, vol. 16(33), pages 369-406, October.
- Grüner, Hans Peter & Hayo, Bernd & Hefeker, Carsten, 2005.
"Unions, wage setting and monetary policy uncertainty,"
Working Paper Series
0490, European Central Bank.
- Gruener Hans Peter & Hayo Bernd & Hefeker Carsten, 2009. "Unions, Wage Setting and Monetary Policy Uncertainty," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-25, October.
- P. Siklos & M. Bohl, 2006.
"Asset Prices as Indicators of Euro Area Monetary Policy: An Empirical Assessment of Their Role in a Taylor Rule,"
eg0053, Wilfrid Laurier University, Department of Economics, revised 2006.
- Pierre Siklos & Martin Bohl, 2009. "Asset Prices as Indicators of Euro Area Monetary Policy: An Empirical Assessment of Their Role in a Taylor Rule," Open Economies Review, Springer, vol. 20(1), pages 39-59, February.
- Pierre L. Siklos & Martin T. Bohl, 2007. "Asset Prices as Indicators of Euro Area Monetary Policy: An Empirical Assessment of Their Role in a Taylor Rule," Working Paper Series 32-07, The Rimini Centre for Economic Analysis, revised Jul 2007.
- Ivo J.M. Arnold, 2005.
"Optimal regional biases in ECB interest rate setting,"
Nyenrode Research Papers Series
05-01, Nyenrode Business Universiteit.
- Arnold, Ivo J.M., 2006. "Optimal regional biases in ECB interest rate setting," European Journal of Political Economy, Elsevier, vol. 22(2), pages 307-321, June.
- Karsten Ruth, 2007. "Interest rate reaction functions for the euro area," Empirical Economics, Springer, vol. 33(3), pages 541-569, November.
- C.J.M. Kool, 2005. "What Drives ECB Monetary Policy?," Working Papers 05-03, Utrecht School of Economics.
- Dieter Nautz & Juliane Scharff, 2005. "Inflation and Relative Price Variability in a Low Inflation Country: Empirical Evidence for Germany," German Economic Review, Verein für Socialpolitik, vol. 6(4), pages 507-523, November.
- von Hagen, Jurgen & Hofmann, Boris, 2004.
"Macroeconomic implications of low inflation in the euro area,"
The North American Journal of Economics and Finance,
Elsevier, vol. 15(1), pages 5-23, March.
- von Hagen, Jürgen & Hofmann, Boris, 2003. "Macroeconomic implications of low inflation in the euro area," ZEI Working Papers B 29-2003, ZEI - Center for European Integration Studies, University of Bonn.
- Bohl, Martin T. & Siklos, Pierre L., 2005. "The Role of Asset Prices in Euro Area Monetary Policy: Specification and Estimation of Policy Rules and Implications for the European Central Bank," Working Paper Series 2005,6, European University Viadrina Frankfurt (Oder), The Postgraduate Research Programme Capital Markets and Finance in the Enlarged Europe.
- Bernd Hayo & Guillaume Méon, 2012.
"Why Countries Matter for Monetary Policy Decision-Making in the ESCB,"
CESifo DICE Report,
Ifo Institute for Economic Research at the University of Munich, vol. 10(1), pages 21-26, 04.
- Bernd Hayo & Pierre-Guillaume Méon, 2012. "Why Countries Matter for Monetary Policy Decision-Making in the ESCB," ULB Institutional Repository 2013/130369, ULB -- Universite Libre de Bruxelles.
- Ruth, Karsten, 2004. "Interest rate reaction functions for the euro area Evidence from panel data analysis," Discussion Paper Series 1: Economic Studies 2004,33, Deutsche Bundesbank, Research Centre.
- Jakas, Vicente, 2011. "Theory and empirics of an affine term structure model applied to European data," MPRA Paper 36029, University Library of Munich, Germany.
- Eleftheriou, Maria, 2009. "Monetary policy in Germany: A cointegration analysis on the relevance of interest rate rules," Economic Modelling, Elsevier, vol. 26(5), pages 946-960, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.